Democrats rip Trump’s CFPB nominee, calling her role in controversial administration policies ‘a moral stain’
Senate Democrats on Thursday aggressively ripped into President Trump’s nominee to head the Consumer Financial Protection Bureau, saying her involvement as a White House aide in controversial administration policies disqualified her from watching out for average Americans.
In a highly charged confirmation hearing, Democratic senators questioned Kathy Kraninger about her role overseeing the budgets of agencies that developed and implemented the child-separation policy at the border and the response to Hurricane Maria in Puerto Rico — and verbally unloaded on her when she evaded direct answers.
Sen. Elizabeth Warren (D-Mass.) could barely control her rage as she pressed Kraninger about whether she had any role in implementing the “zero tolerance” immigration policy that has separated nearly 3,000 children from their parents crossing the U.S.-Mexico border since April.
Kraninger said she was not involved in setting the immigration policy but repeatedly said she could not answer questions about any advice about implementing that or other policies that she gave at the White House.
“These are innocent children who may be scarred forever by this policy. It is fundamentally immoral and you — you — were part of it, Ms. Kraninger,” Warren said during the Senate Banking Committee hearing.
“It is a moral stain that will follow you for the rest of your life,” she continued. “And if the Senate votes to give a big promotion to you after this, then it is a stain on the senators who do so.”
Sen. Robert Menendez (D-N.J.) also attacked Kraninger, associate director for general government at the White House Office of Management and Budget, for the administration’s bungled response to Puerto Rico’s hurricane damage.
“You were a significant architect of the Trump administration’s response in Puerto Rico, which was at best botched and incompetent. At worst it reflects the administration’s most insidious views about Hispanic Americans,” he said.
“And instead of turning to help them you pinched pennies. And worst of all, I think you treated them like second-class citizens,” he said. “That does not give me the faith that when you’re going to have to stand up for seniors, service members, students, homeowners against some of the biggest financial institutions in this country, that you’ll do that.”
The dispute over Kraninger’s nomination highlights the highly partisan battles over the bureau that have existed since it was created by the 2010 Dodd-Frank Act in the wake of the financial crisis and, now, Democratic opposition to some key Trump administration policies.
“This is a multifaceted battle with the president, being played out in the context of this committee’s nomination process,” lamented the panel’s chairman, Sen. Michael D. Crapo (R-Idaho), who supports Kraninger’s nomination. He said he hopes to hold a confirmation vote in the committee in two weeks, with Kraninger likely to be confirmed by the full Senate in the coming months.
Trump surprised consumer advocates, financial industry executive and analysts last month when he nominated Kraninger to head the CFPB. She is a little-known White House aide whose background has been largely in Homeland Security, and she has no experience in consumer protection, financial regulation or the banking industry.
At the Office of Management and Budget, Kraninger oversees spending at five agencies, including the Department of Homeland Security.
Previously, she served as deputy assistant secretary for policy at the Department of Homeland Security during the George W. Bush administration and also worked for the Senate Homeland Security and Governmental Affairs Committee and the Senate Appropriations subcommittee handling Homeland Security funding.
Kraninger is seen as a protege of Mick Mulvaney, the director of the White House Office of Management and Budget who also has served as acting director of the CFPB since November.
Trump installed Mulvaney in the position temporarily after the resignation of the bureau’s first director, Richard Cordray, in a controversial move that led to protests and a legal challenge from Cordray’s chosen successor, Leandra English.
Mulvaney had been an outspoken critic of the agency and has scaled back the bureau’s enforcement efforts and made it more industry friendly.
Kraninger, who has worked for Mulvaney at the OMB since March 2017, is expected to continue his approach to running the agency.
In her testimony, Kraninger said she would work to uphold Congress’ mandate that the bureau ensure that all consumers have access to financial products and services that are “fair, transparent and competitive.”
She said she would do that in part by making “robust use of cost-benefit analysis,” a favored approach of Republicans that Democrats argue can be manipulated by industry and create roadblocks to quickly enacting important regulations.
Kraninger pledged to take “aggressive action against bad actors who break the rules.”
“Nothing is more destructive to competitive markets and consumer choice than fraudulent behavior,” she said.
Kraninger also signaled she opposed the funding independence that Congress gave the CFPB when it established the agency.
Like most other financial regulators, including the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., the bureau is funded outside the congressional appropriations process to help insulate it from political pressures.
Republicans on the committee supported Kraninger’s nomination for the job, which has a five-year term.
“Given her depth and diversity of public service experience, I have the utmost confidence that she is well prepared to lead the bureau in enforcing federal consumer financial laws and protecting consumers in the financial marketplace,” Crapo said.
But even some moderate Democrats who are up for reelection this year in states won by Trump in 2016 expressed serious concerns about her background and experience.
“It is no secret that Mr. Mulvaney is no fan of the CFPB. That aside, would you say he has done a good job as acting director?” Sen. Jon Tester (D-Mont.), asked Kraninger.
When she didn’t directly answer, Tester ordered her to answer the question.
“He is my current boss, who I respect greatly, and has been focused on implementing the law, so from that standpoint, I would say, ‘Yes,’” Kraninger said.
After her nomination, committee Democrats sent letters to Kraninger pressing her for answers about her involvement in the immigration and hurricane relief policies. They were frustrated that she did not answer and unsuccessfully pushed Crapo to delay the hearing until she did.
“For months, I urged the administration to nominate someone to lead the CFPB who had a track record of working for consumers. Unfortunately, Ms. Kraninger has no experience whatsoever in consumer protection,” said Sen. Sherrod Brown (D-Ohio).
“Nobody wants Mr. Mulvaney out of the CFPB faster than I do. But American consumers can’t afford five years of someone who stands with the bankers in this administration and on Wall Street,” Brown said.
Democrats said they were frustrated by Kraninger’s refusal to answer questions about her management experience at the White House, which her supporters point to as offsetting the lack of experience in the consumer financial field.
“You’re coming in and asserting that you’re a manager and you can’t characterize anything you’re doing as a manager,” said Sen. Brian Schatz (D-Hawaii).
Twitter: @JimPuzzanghera
